Orlando airport authority selects less-lucrative bid for contract

November 18, 2009|By Scott Powers, Sentinel Staff Writer

The board that runs Orlando International Airport decided Wednesday to allow a company to continue operating news and gifts shops for another seven years, despite a competing offer that could be worth as much as an additional $1 million a year income for the airport.

The problem: airport officials said they fear the competing proposal might run afoul of new federal guidelines designed to crack down on airport concessionaires who take advantage of loopholes in rules that assure women and minorities get shares of the federally backed business.

No one openly accused the losing company, Paradies-Orlando, of creating a fake minority partnership. But uncertainty over how Paradies structured commitments from its minority partner, Robert de Varona, convinced the Greater Orlando Aviation Authority board Wednesday to turn down its $2.7 million-per-year minimum offer on a seven-year contract.

Instead, the board awarded the contract to Stellar Partners, which pledged a minimum payment of $1.7 million per year to operate news and gifts stores on the east side of the main terminal building and in Airside 4. Stellar and its partner, The Hudson Group, have the current contracts for those stores.

The 6-to-1 board vote left Varona, his partners and their lawyers accusing GOAA of a thin misinterpretation of federal guidelines, and mulling the prospect of appealing to court.

"In every respect these are two good vendors, except … one is going to make you 7 million more bucks over seven years," said Kenneth W. Wright, one of Paradies-Orlando's lawyers.

The problem involved conflicting interpretations of new Federal Aviation Administration guidelines. The key point was how the Paradies company would raise $1.4 million or more to remodel the two stores and whether Varonathe minority partner, was legally liable to repay a portion of it. Paradies' lawyers argued that it has similar contracts at other airports that have been accepted by the FAA and that GOAA's legal counsel, Marcos Marchena, misinterpreted the new guidelines.

The guidelines are complex enough that Marchena changed his mind on his interpretation a few weeks ago after discussing them with the FAA. And Wednesday he told the board, "Is it possible I'm wrong? Of course. But I have done my analysis on what I think are the requirements of the regulations and the requirements of the guidelines."